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As much of Europe spent the last month worrying about what might happen if Russia decided to shut the valve on its gas supply, Athens has apparently decided the time is right to push a new energy role. This week, Greece’s Energy Ministry launched an international tender for a pipeline project that would transport about 8 billion cubic meters of gas into the European market from offshore fields controlled by Cyprus and Israel. According to a Reuters report, the project would link Israel’s Leviathan natural gas field to Europe by way of Greece through the IGI-Poseidon pipeline, managed by Italy’s Edison and Greece’s state-backed utility, DEPA.

For Israel, the pipeline would provide the country’s first long-distant export option. Israel has recently announced a series of export agreements for its offshore efforts, 40 percent of which is allotted for sale outside of the country. However, so far, they have all been local, including sales to Jordan, Palestinian utilities and talks with both Egypt and Turkey. For Greece, a successful pipeline would help them carve out a long-sought energy role in the area.

Over the last three years, Athens has made a concerted effort to lay claim to the Eastern Mediterranean's recent energy rush, both as a potential transport hub for Israeli and Cypriot gas reserves and as a producer itself. The latter role, which has included studies suggesting offshore reserves near Crete, has failed to catch fire beyond political rhetoric. Meanwhile, after this week, it appears the country’s transport aspirations may have some potential.

Europe’s Diversification Key?

The transmission line would create a direct line between the Eastern Mediterranean’s vast offshore reserves and a European market in need of energy diversification - a goal that has become central to the region’s energy policy since 2009. That year saw Russia halt natural gas imports to Ukraine in the cold winter months, leading to shortages across East Europe.

In the years since, Europe has set out to establish new import options, increase domestic production alternatives, encourage renewable options - all meant to ease dependence on Russian reserves. While moderately successful, these efforts have suffered from a series of setbacks, including a downturn in renewable financial support and unrest in North African producing countries like Libya and Algeria. The region’s progress grabbed the spotlight this month as tension between Moscow and Ukraine highlighted just how dependent Europe is on Russian reserves.

Months before the most recent flare-up with Russia, the proposed pipeline received a vote of confidence from the European Commission when it was selected as one of their Projects of Common Interest (PCI). This 2013 plan designated 248 energy infrastructure projects across the EU that would receive their support as well as give them access to $8.13 billion in available funds. It was chosen as one of Cyprus’ three PCI projects.

However, despite such support and the recent attention diversification efforts have gotten since Russia began moving troops toward the Crimea, the pipeline is not without its challenges. First and foremost the pipeline could extend into contested waters between Greece and Turkey. Already frustrated with Cypriot progress towards exploration and gas production in the region, Ankara could prove difficult to win over, especially if the project sidelined proposed Turkish transport alternatives.

Recent reunification talks between the Republic of Cyprus and the Turkish held north side of the island have allowed some hope that the issue of sharing regional gas benefits to bed, though bringing the 40 year old dispute to an end soon could be wishful thinking.

The Greek-led pipeline could also face a significant challenge when it comes to financing. While access to the EC fund could provide some support, paying for what promises to be an incredibly expensive endeavor (especially considering the pipeline depth), could be difficult. Both Greece and Cyprus remain weighed down by years of economic turmoil. In the case of Greece, now entering its sixth year of recession, attracting needed investment partners will be difficult, bordering on impossible without firm support from Europe and other global lenders.